1 COMMONWEALTH OF PENNSYLVANIA 2 GAMING CONTROL BOARD IN RE: HSP GAMING, LP...

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SARGENT'S COURT REPORTING SERVICE, INC.(814) 536-8908

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COMMONWEALTH OF PENNSYLVANIA

GAMING CONTROL BOARD

* * * * * * * *

IN RE: HSP GAMING, LP (SUGARHOUSE) - PETITION TO

INTERVENE IN THE CATEGORY 2 PROCEEDINGS

* * * * * * * *

PUBLIC HEARING

* * * * * * * *

BEFORE: WILLIAM H. RYAN, JR., Chairman

Gregory C. Fajt; Anthony C. Moscato;

Annemarie Kaiser; Keith R. McCall; John

J. McNally; David W. Woods; Members,

Jennifer Langan, representing Robert

McCord, State Treasurer, Robert P.

Coyne, representing Daniel P. Meuser,

Secretary of Revenue Jorge Augusto,

Representing George Greig, Secretary

of Agriculture

HEARING: Wednesday, January 8, 2014

LOCATION: Pennsylvania Gaming Control Board

Strawberry Square Complex, 2nd Floor

Harrisburg, PA 17101

Reporter: Lacey C. Gray

Any reproduction of this transcript is prohibited

without authorization by the certifying agency.

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A P P E A R A N C E S

OFFICE OF ENFORCEMENT COUNSEL

CYRUS PITRE, ESQUIRE

Chief Enforcement Counsel

DALE MILLER, ESQUIRE

Assistant Enforcement Counsel

PA Gaming Control Board

P.O. Box 69060

Harrisburg, PA 17106-9060

Counsel for the Pennsylvania Gaming Control Board

JOHN M. DONNELLY ESQUIRE

Levine, Staller, Sklar, Chan, Brown & Donnelly PA

3030 Atlantic Avenue

Atlantic City, NJ 08401-6380

Counsel for HSP Gaming, LP

KEVIN C. HAYES, ESQUIRE

Scanlon, Howley & Doherty, PC

217 Wyoming Avenue

Scranton, PA 18503

Counsel for Market East Associates

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A P P E A R A N C E S (cont'd)

ROBERT J. FITZGERALD, ESQUIRE

Buchanan, Ingersoll & Rooney

Two Liberty Place

50 South 16th Street, Suite 3200

Philadelphia, PA 19102-2555

Counsel for Pennsylvania Gaming Ventures

ALAN C. KOHLER, ESQUIRE

Eckert, Seamans, Cherin & Mellott, LLC

213 Market Street, Suite 900

Harrisburg, PA 17101

Counsel for Stadium Casino

MICHAEL D. FABIUS, ESQUIRE

Ballard Spahr, LLP

1735 Market Street, Suite 1500

Philadelphia, PA 19103

Counsel for Tower Entertainment

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I N D E X

PRESENTATION

By Attorney Donnelly 6 - 17

By Attorney Hayes 17 - 19

By Attorney Fitzgerald 19 - 25

By Attorney Kohler 25 - 26

By Attorney Fabius 27 - 30

By Attorney Miller 30 - 31

By Attorney Donnelly 31 - 32

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E X H I B I T S

Page Page

Number Description Offered Admitted

NONE OFFERED

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P R O C E E D I N G S

----------------------------------------------------

CHAIRMAN:

All right. Now, having established

that HSP is the only Petitioner in this proceeding,

we will begin our final hearing prior to our public

meeting, specifically the hearing on HSP's Petition

to Intervene in the Category 2 proceedings.

Counselor, you're on again.

ATTORNEY DONNELLY:

Thank you. First of all, I don't mean

to --- by using adversarial I'm using it in general

terms. I recognize --- I agree with what Mr. Miller

put on the record as to Office of Enforcement

Counsel's (OEC) role here. I may slip and continue

to call them as an adversary but I don't mean that

literally in a legal term.

The standard for intervention in an

administrative proceeding, especially before this

Board, the bar is very low. I do take issue with the

recitation of what the standard is. I don't think

that's a standard and I don't think that it's set

forth in the current version of the regulations.

I don't think that purports with the

Bensalem case, which addressed this issue or the

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Supreme Court's case in Society Hill case.

Essentially the way I understand what the Court and

the Supreme Court said and Bensalem said is, you have

to look at these things two different ways. First of

all, intervention. At the administrative level all a

person or an entity needs shown is a direct interest

and that direct interest can be a competitor. I

think that was made quite clear by both courts. Once

you have that interest of a direct competitor you are

eligible for intervention.

I'll come back to whether intervention

must be granted, but it's clear, I think, without

argument that we have met the standard of

eligibility. There is a second standard and that is

of standing, and the standing standard comes in at a

later stage in the proceedings at a court level. And

standing --- as OEC pointed out earlier, standing is

a concept essentially developed by the federal courts

and imported into the state courts.

And it has to do with concepts that are

not present here. It has to do with concepts such as

separation of powers, whether federal court should be

interfering or whether a court should be interfering

with things that legislators do or executives do.

So, when a litigant appears before a court, the

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judicial branch, the Court is supposed to put its hat

on and say, well, I've got to think about who that

litigant is. I'm one of three co-equal branches.

And part of whether I hear from the litigant is to

show respect, be it a judicial respect or a

Constitutional respect to my other branch. So,

that's one element of standing.

Another important element of standing

that we don't have here, that we don't have the first

one, is the question of whether or not you have an

administrative proceeding. In this particular action

the administrative entity in question is a branch of

the executive. So, you don't have those --- the

separation of power issues. Second issue that you

often see in standing cases is where someone is

asking federal court to overcome a state court

action.

Obviously, we don't have that here. We

don't have the problems that the federal court

developed these concepts of standing and adjudication

based on the Federal Constitution. We don't have

that problem here because this is all state issue.

We don't have the federalism issue of standing that

usually causes a standing problem because no one is

asking federal court to do anything here. So, we

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don't have a separation of powers problem. We don't

have a federalism problem.

Thirdly, as I think probably more

importantly --- I may be running too long --- the

Supreme Court made it plain that those are two

different concepts. The concept of standing versus

the concept of intervention. And as the previous

Applicant made the point that the Court made it clear

that a person who has a direct interest is to do

exactly what we're doing here, move to intervene

before the administrative agency. And once we have

intervened before the administrative agency, should

we take a litigated matter to the Court, the Court

would then apply a different standard for standing.

And that different standard is direct

immediate and not being adequately represented by any

other party. Standard at this level is just direct.

It's not immediate. It's not substantial. It's not

whether other parties can represent. So, I come back

and I think the Ccourts have made it quite clear that

we have a direct interest in these proceedings at

Sugarhouse where a competitor would put out a lengthy

written statement.

We've proffered a relatively lengthy

expert report to address the elements of competition.

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I don't think that this is the appropriate time to go

into the merits. I know it isn't. So, I won't do

that, but I do want to point out that in our written

statement and in the expert report we noted that the

--- what the legislature of this Commonwealth has

already recognized, that there is extreme competition

that has been created in the --- whatever market you

want to define, Philadelphia area market, the

Mid-Atlantic or the northeast, since the statute was

adopted in 2004. New York, as this Board is well

aware because I know it watches these matters very

closely, it's coming online now. Delaware is

expanding. New Jersey just went internet.

Pennsylvania itself is considering internet.

Pennsylvania has the tavern bills. Maryland is

expanding, recently expanded in --- Baltimore area is

now going to develop a casino outside of the

Washington area.

So, we're essentially being surrounded

by competition, Ohio. All of these factor in. It's

not a happy situation at all and part of the purpose

of having someone like Sugarhouse to come in to

intervene is to try to put those elements forth.

Now, as I stated before, a couple of the --- my

adversaries do not object to the intervention. I

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don't understand that Market 8 or Stadium object to

intervention, however, they do have conditions that

they would like the Board to impose.

There are varying conditions, I won't

go over them all. You can find them online, but we

have no problem with agreeing to meet the time tables

that are set forth with the Board, follow the Board's

rules and play and color with inside the lines. We

certainly intend to do that.

The real objections are --- the

objections of OEC are essentially that the written

statement and petition are in some cases hearsay and

some cases just set forth generalized statements of

competition. Well, at this stage of the proceeding,

as I understand your rules and regulations, that is

what we are supposed to do. We're supposed to send

in a written statement as one of the adversaries did

know. The written statement is to put the

adversaries on notice as to what you want to

intervene in and what you intend to --- you know,

kind of giving a generalized presentation as to what

your theory is.

If we're granted intervention status we

will take that written statement, add appropriate

citations and perhaps alter or amend it as we

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reserved our right to do, but when it is submitted,

if we're permitted the authority to submit it, it

will have --- it'll be a document that at least the

Board can take, if nothing else, judicial notice of

given the facts --- for the most part facts set forth

in there are public record.

For example, New York just authorized

additional casinos. Moreover, one of the purposes of

sending around, circulating the expert report before

the hearing was to have the expert endorse the facts

in that --- in the written statement. An expert can

rely on hearsay in forming his opinions and the

expert in this case adopted the facts set forth in

the written statement and added some and, of course,

gave some preliminary opinions and so on.

I will kind of --- I think we also ---.

Not only do we fall squarely into the Bensalem and

Society Hill case, we also fall squarely into the

rules of appellate procedure. I think it's 35.28,

which has directly affected, not directly,

substantial and immediate. I do want to address ---

it has three rules there, directly affected, not

adequately represent and may be bound by the ruling.

Well, we'll certainly be bound by a ruling that this

Board makes.

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We are directly affected. I think it's

clear under --- under case law I cited. And the case

law also addressed the general rules of appellate

procedure. I won't go over it again because I know

this Board is familiar with both of those cases. We

fall squarely into that. As to adequately

represented, we've raised a number of issues that

have not been raised to my knowledge, and certainly I

haven't heard or seen written any analysis of the

competition that's going on coming down the pike,

what's going on in Atlantic City, what's going on in

these other states or what's going on in the

Commonwealth. I haven't seen any of that.

I have seen that the legislature has

acknowledged it and recognized it, and is right now

out with a request for proposals to do a study in

this matter and to make a determination as to what,

if anything, the Commonwealth should do to look at

its gaming loss, that no one is raising. I don't

believe anyone has raised 1304 and 1330. The two

statutory provisions that we put forth in our written

statement, which I believe affects at least three of

the Applicants and maybe more. There's one of the

things I put forth.

I did my very best to dig through the

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public records to determine what the ownership is and

the Board has a very good --- but difficult to

decipher, but very good site to go through that. But

I do not know and will not know, I don't think our

client will know for sure, what all these interests

are until such times as we get into the licensing

proceedings. In interest of time, we have a way of

sliding around. There are management companies

involved. There may be changes in ownership by the

time we get to licensing. No one has raised those

issues at all.

And finally no one's looking at, I

don't think for Sugarhouse, is that --- Sugarhouse is

what I used in the petition, it's parties who are

interested in what Sugarhouse does. We have a number

of interests. We have interests in people who own

the property, interests in our employees, we have

interests of the city and interests of the

foundation. We have interests of a special services

district. Just really watch --- I'm sure the Mummers

the other day, Sugarhouse sponsors the Mummers

Parade.

Sugarhouse has to look out --- and it's

easy to say, well, you're just looking out for your

profits. Well, we're not just looking out for our

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profits. As most of the people, a number of the

Commissioners are aware of, I've spent probably

35 years in dealing with casinos and a lot of them in

New Jersey, and I still represent casinos in New

Jersey. I've seen firsthand what happens when you

have too much competition.

There's only certain things that

businesses can do to survive. They have mortgages,

they have fixed duties, taxes and mortgages. And

when there is insufficient revenues coming in there's

only so many levers that people can pull. And those

levers I will submit --- and if granted intervention

our expert in the testimony we'll put in will try to

point that out to support it. Because those levers

are not good, in our opinion, for the Commonwealth.

It causes people to start worrying about capital

expenditure because you can cut back on something

like that, start worrying about expansions, start

worrying about whether you're hiring new employees or

promoting employees.

And I've seen it and, like I said, one

of the statistics I put in with the petition was

we've seen a decline in revenues there of almost

40 percent. Almost to the point, five billion to

three billion. And almost to the same numbers.

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Approximate number of employees go from about 50,000

to about 30,000. It's not a happy scene out there

and one of the things casinos can control are

revenues and may well be determined that there are

additional revenues, but having additional revenues

is not a good thing for the long term success in the

state --- Commonwealth.

I also want to point out to a special

interest of not being adequately represented ---.

CHAIRMAN:

Counselor, just ask you to ---.

ATTORNEY DONNELLY:

I'll speed up. Sugarhouse is currently

in $100 million plus, almost $150 million expansion

where we will be adding additional gaming product,

additional amenities and so on. All this was

committed to way back when in the initial licensing

hearings. And so that's another element of not only

additional competition, but interest.

I'll wrap up with when I was looking to

writing the statement I looked through a lot of

reasons to show a specialized interest and I came

across --- I looked a lot at economists just to see

what quotes there might be. One really struck me

from Kings. Not that I'm endorsing necessarily what

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he said, but he had a statement that stuck in my

mind. Something along the lines of two misses for

the poor are great, two trains for London to New York

not so great.

And that's what I think we want to try

to bring forth to this Board, that adding additional

supply to this market where there's insufficient

demand now is not going to be a happy thing we don't

believe for Sugarhouse, for the rest of the casinos,

and for the Commonwealth. And for all of the people

that have an interest in the health and welfare of

the casino. Thank you.

CHAIRMAN:

Okay. Thank you, Counselor. Market

East.

ATTORNEY HAYES:

Mr. Chairman, members of the Board,

again Kevin Hayes on behalf of Market East

Associates. Our positions are set forth in our

responsive brief, so I'll try to be very brief in my

response to Sugarhouse's Counsel. As a general rule,

Market East Associates does not oppose Sugarhouse's

Petition to Intervene. If the Board is so inclined

to grant their Petition to Intervene we request that

certain conditions be placed on that, on that

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approval.

First and foremost we would

respectfully request that the Board strike the

written statement which accompanied the December 16th

submission of Sugarhouse because it is --- doesn't

comply with the Board's regulations relating to the

written statement and it violates rules of evidence

pertaining to administrative proceedings.

Next, we would ask that Sugarhouse not

be afforded any participation that is greater than

the parties themselves. In other words, clearly

Counsel has indicated that he would like to

participate in pre-hearing discovery. There's

nothing in the Board regulations or in the Rules of

Evidence pertaining to administrative proceedings

which would entitle them to that and we would

strongly oppose that. Lastly, any effort that ---

any attempt to request by Sugarhouse --- and I don't

know if that's still out there, that they would be

able to cross examine our witnesses during the

proceedings, we would respectfully request that that

be denied as well.

We think it's clear that the Board has

discretion in determining the extent that a party can

participate once granted intervention and we would

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defer to the Board on that. Thank you.

CHAIRMAN:

Thank you very much. PA Gaming

Ventures.

ATTORNEY FITZGERALD:

Thank you, Mr. Chairman. Again, my

name's Robert Fitzgerald. I'm here on behalf of PA

Gaming Ventures. I don't think I need to repeat the

arguments and the objections that we raised in our

answer and objections that we filed on

September 27th. Suffice it to say that it is our

position that Sugarhouse should not be permitted to

intervene in our licensing proceeding for three

reasons. First, and I think that's a point that has

been made in most of the objections and answers, the

so called interests that Sugarhouse has identified.

Primarily the purported interest in what they call a

direct and competitive harm that another Philadelphia

casino might cause can only be grounds for

intervention if one is to disregard the plain

language of the Gaming Act. There is and can be no

dispute that the Gaming Act requires that two casinos

be licensed in Philadelphia.

Section 1304 requires that the next

Category 2 License that this Board issue be in

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Philadelphia. Section 13 --- excuse me. That was

Section 1307. Section 1304 is even more explicit.

It says, two Category 2 License facilities and no

more shall be located by the Board in the city of the

first class.

The General Assembly determined that a

distribution of Gaming and Slot Machine Licenses

allowing for two Category 2 casinos in Philadelphia

was necessary to provide Philadelphia, the only city

of the first class, its fair share of expected

revenues and development. An unanticipated turn of

economic events frustrated the first attempt to build

and license that first Philadelphia casino. As a

result Sugarhouse has, for the last years --- last

six years, enjoyed what is effectively a monopoly

position in the city.

At its core we think the petition is

merely an attempt by Sugarhouse to maintain the

status quo, notwithstanding a clear intent of the

legislature and the requirements of the law. This

interest in denying the competition is admittedly

very real and very personal to Sugarhouse, but it's

not the legitimate direct, substantial or immediate

interest that might justify intervention.

I do want to be clear, the substantial

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direct and immediate is the standard. That's what's

sets forth in the regulation. And all of the

discussion about the federal standard and separation

of powers, I just don't think it applies nor does the

standard that might be set forth in the general rules

of administrative practice and procedure. The rules

governing this licensing proceeding and intervention

in this proceeding are set forth clearly in Section

441A.7Z.

The second reason that Sugarhouse

intervention should be denied is because it's simply

not necessary. The issues that Sugarhouse claims

that require its participation, the competitive harm

that we talked about and the enforcement of the

Gaming Act's ownership criteria will be fully

presented, discussed and considered at PA Gaming

Ventures' January 28th hearing even without

Sugarhouse's participation. The Gaming Act requires

nothing less from PA Gaming Ventures and this Board

in that these issues receive a complete hearing.

Thus to apply the standards set forth in the

regulations, Sugarhouse's alleged interests will be,

quote, adequately represented.

Lastly, Sugarhouse made speculative

pronouncements regarding the damage a second

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Philadelphia casino will do to the gaming market

across the Mid-Atlantic and northeast sections of

this country. At this hearing I need only note that

Sugarhouse is simply wrong when it suggests giving a

license to PA Gaming Ventures will fail to meet the

Act's demands for revenue, development and job

opportunity.

I won't spend time on the details. At

the January 28th hearing, PA Gaming Ventures will

establish the economic benefits, the operational

viability and the employment development that will

result from its building of the Hollywood Casino.

The salient point here is that Sugarhouse's fear that

a second casino will result in the demise of gaming

is not grounds for intervention. It's simply not

true.

If I may, I'd like to address a little

more fully Sugarhouse's alleged interest in enforcing

the ownership and multiple license limitations in

Sections 1304 and 1330 of the Gaming Act. Sugarhouse

directed its concerns to only some of the Applicants

and PA Gaming Ventures, which is one of those

Applicants. Again, I don't think it's necessary or

appropriate at this hearing to show that PA Gaming

Ventures satisfies the requirements to the Gaming Act

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on these issues.

I will note, however, that I don't

think, contrary to the representation of Mr.

Donnelly, that this is a new issue that's going to be

raised by Sugarhouse's intervention. As the Board

may be aware, PA Gaming Ventures has been involved in

a number of communications with the OEC to discuss

its ownership structure, its compliance with 1304 and

1330. PA Gaming Ventures will be attending a second

pre-hearing conference with the Bureau of Licensing

and the OEC on January 14th, and the role that these

issues may play at the January 28th hearing will be

discussed at that time.

Most importantly PA Gaming Ventures

will, of course, address its ownership structure at

the hearing and will answer at the time any questions

the Board and its staff might have. In sum, there

have been and will be opportunities to fully address

the meaning and application of Sections 1304 and

1330. I would only state that the multiple license

limitations were intended and has always been

understood to allow for a Licensee to own one-third

of another license. And PA Gaming Ventures' proposal

adheres to that understanding and that Penn National

Gaming, Inc. is only one-third owner of PA Gaming

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Ventures.

Of course, there are many details

pertaining to Penn's control or lack thereof of PA

Gaming Ventures. On that point, the Board's

clarifying regulations provide the contractual

interests including those in management contracts are

not to be considered when determining ownership

interests. That's set forth in Sections 441A.17,

paragraph G and I.

Even so, PA Gaming Ventures and Penn

have worked closely with the Board staff to explain

the details of Penn and PA Gaming Ventures management

and operations agreements and to explain how they do

not conflict with the Act's requirements. The real

point here, of course, is that there's nothing in

Section 1304 or 1330 that provides a reason for

Sugarhouse to be a party in the licensing proceeding.

Clearly the issues of ownership and

control have been and will be more than adequately

considered. Sugarhouse can contribute nothing to

those discussions or to the resolution of that issue,

at least certainly identified nothing that it can

contribute. Which brings me to the request for

discovery.

Sugarhouse has essentially made in its

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paper, and I think today, that it does not know if

there is a problem with PA Gaming Venture's

application. Therefore, asks leave to find out what

it can, and this is the definition of a fishing

expedition. As explained in our papers, discovery is

unnecessary, inconsistent with and contrary to the

governing regulations and unfairly prejudicial to PA

Gaming Ventures.

We ask for the request for discovery be

denied and the hearing move forward. PA Gaming

Ventures --- in conclusion PA Gaming Ventures opposes

the request for intervention and ask that the Board

exercise its discretion to deny the Petition to

Intervene. Thank you.

CHAIRMAN:

Thank you, sir. EHL Local Gaming?

ATTORNEY PITRE:

Not represented here today.

CHAIRMAN:

Okay. Stadium Casino?

ATTORNEY KOHLER:

Good afternoon. I'll be very brief.

As Mr. Donnelly mentioned, Stadium Casino does not

oppose intervention. The reason for that is not that

I necessarily disagree with Mr. Fitzgerald or Mr.

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Fabius, but having been much involved in these

intervention cases that have been cited in the

Appellate Courts we see too much exposure on appeal.

And, you know, simply put we don't want to have to do

this twice.

With that said, intervention gives, you

know, a very limited role under the Board's

regulations and the statute. There's no right to

discovery. There's no right to Cross Examination

under the statute and, in fact, for our Intervenors

there's no right to even really do a presentation.

The right is to submit an expert report or written

testimony.

We ask the Commission that if they do

grant intervention, that the participation should be

limited. As to 1304 and 1330, which were also raised

against Stadium Casino, whether or not Sugarhouse is

adequately represented by the OEC and BIE, in general

they certainly are on 1304 and 1330. As Mr. Donnelly

may not be aware, those issues are addressed in great

detail in the suitability reports and I'm sure are

going to be addressed and represented well by OEC at

the suitability --- at the licensing hearings. With

that I'll rest.

CHAIRMAN:

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Thank you very much. Okay. Tower

Entertainment.

ATTORNEY FABIUS:

Last but not least. Last and least.

I'll refrain from repeating points of my colleagues.

We certainly agree with respect to the conditions if

intervention is granted. I'd like to focus why Tower

Entertainment is in a unique position. Market

competition in and of itself is not sufficient

grounds to establish a substantial, immediate, direct

interest required for intervention.

Mr. Fitzgerald already walked through

1304 and 1307 requiring a second Category 2 License

facility. The Board is presently in litigation in

which Tower Entertainment is an intervenor. It's at

Commonwealth Court where there were oral arguments in

December. Chief Counsel, Doug Sherman, argued at

that hearing in front of Commonwealth Court that even

if all five Applicants were found --- were unable to

demonstrate the eligibility of suitability the Board

under 1304 and 1307 would have to put the

applications back out for bid and attempt to

effectuate the mandate in 1304 and 1307.

The significance of that is to the

extent Sugarhouse feels it's actually injured, the

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correct forum is General Assembly and the text of

Sections 1304 and 1307. You know, General Assembly

expands small games of chance, and did not touch 1304

and 1307, leaving two Licensees in the City of

Philadelphia.

A direct interest, which Mr. Donnelly

concedes he has to demonstrate. A direct interest

means the matter complained of caused harm to the

party's interests, i.e., there is a causal connection

between the harm and the violation of law. To the

contrary, there's no violation of law. The law says

there shall be two Category 2 facilities in the City

of Philadelphia.

But more importantly the causal

connection is the statute, not the present licensing

proceeding. So, there's no causal connection between

the perceived injury and the proceeding in which

they're seeking intervention. Therefore they can't

substantiate a direct interest.

I would respond to two specific points

as well. Mr. Donnelly says there are three

Applicants for which he has explicitly contested

eligibility, Tower Entertainment is not one of them.

Tower Entertainment's ownership is not a secret.

It's on the Board's website, it's Bart Blatstein.

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Bart Blatstein does not have any ownership interest

in any other casino in the Commonwealth of

Pennsylvania.

There's a minority interest under one

percent of Mr. Robert Bogel (phonetic). He does not

have any ownership interest in any casino in the

Commonwealth of Pennsylvania. There is no 1304 or

1330 issue with Tower Entertainment. There is no

eligibility issue raised in Sugarhouse's petitions.

That puts them in stark contrast to each other

Petition to Intervene that the Board has granted in

prior licensing applications.

Parx obtained intervention status in

Valley Forge contesting Valley Forge's eligibility as

well as established resort hotel. Mountain View

Thoroughbred Racing Association obtained intervention

status in Penn Harrah's Gaming in 2010 on the grounds

that Penn Harrah's Gaming was not eligible for a

Category 3 License. And Meadows obtained

intervention status in the Application of Woodlands

Fayette, LLC on the grounds that Woodlands Fayette,

LLC was not a well established resort hotel.

They have no eligibility argument.

They have no interest in Tower Entertainment and even

if the Board were to grant intervention in the other

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applications we would ask that the Board deny an

intervention in Tower Entertainment's application.

Thank you.

CHAIRMAN:

Thank you.

ATTORNEY DONNELLY:

Mr. Chairman, may I reply one minute?

CHAIRMAN:

Tell you what, why don't we get the OEC

first and then we'll give you one minute?

ATTORNEY MILLER:

Trying to step on my toes again. Mr.

Chairman and members of the Board, we really don't

have a dog in this fight other than to make sure that

the Board is aware of our position with regard to the

regulations and Sugarhouse's compliance with the

same. As is explained in our answer and objection,

we believe that Sugarhouse has simply not met the

requirements for intervention in a licensing hearing.

And we don't believe it's an abuse of the Board's

discretion to deny the petition. However, if the

Board were to grant intervention to Sugarhouse we ask

that the Board not give them any competitive

advantage over the other Applicants. Providing

discovery to Sugarhouse, providing Sugarhouse the

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means of obtaining documents which they're not

entitled would give them such a competitive

advantage, and we ask that if the Board were to use

their discretionary powers to grant intervention that

they deny the right to discovery or any other method

of obtaining a competitive advantage by Sugarhouse.

Thank you.

CHAIRMAN:

Mr. Donnelly.

ATTORNEY DONNELLY:

One minute.

CHAIRMAN:

One minute.

ATTORNEY DONNELLY:

In our written statement we did address

a direct, substantial, immediate standard. We did

not --- although I disagree I think the standard is

direct. We addressed it and I think we meet it.

Number two, the Board does have discretion, I think,

but it would be an abuse of discretion and Bensalem

makes very clear it would be an abuse of discretion

to turn down this application. Number three, the

argument that the law mandates that this second ---

this license be reissued, that's in litigation right

now. And that's an opinion that's held by persons.

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But other people have different opinions, so that ---

we're not commenting on that litigation. We do know

it's in litigation.

To the extent that Penn says that we

don't believe that there's a problem with their

application, that's not correct. We do believe

there's a problem with their thing. And then finally

just close up, again, I come back to the case law I

think which was very clear that we've met the

standard for intervention.

CHAIRMAN:

All right. Thank you, sir. Questions

from the Board? Ex-Officio members? Thank you,

ladies and gentlemen. The matter's now closed. I

note it's 1:25. The Board will take a recess why

don't see say 'til 2:15. And when we come back we'll

begin today's public meeting. So we're in recess

until 2:15. Thank you all.

* * * * * * *

HEARING CONCLUDED

* * * * * * *

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CERTIFICATE

I hereby certify that the foregoing proceedings,

hearing held before Chairman Ryan was reported by me

on 1/8/2014 and I Lacey C. Gray read this transcript

and that I attest that this transcript is a true and

accurate record of the proceeding.

1 COMMONWEALTH OF PENNSYLVANIA 2 GAMING CONTROL BOARD IN RE: HSP GAMING, LP...

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